Highland Europe Closes Billion-Euro Fund to Invest in Digital Startups

Highland Europe has closed a billion-euro fund to back growth-stage digital-focused businesses.

The European arm of global venture capital (VC) investor Highland Capital Partners announced the close of its fifth and largest fund on Monday (Jan. 23), stating it had raised the billion euros ($1.09 billion) “to double down on its strategy of backing the Continent’s most outstanding founder-led teams in software and internet businesses.”

With the latest fund, to date, Highland Europe has raised a total of 2.75 billion euros. Some of its previous investments include Deepki, Featurespace, Huel, Jellysmack, MatchesFashion, WeTransfer, Wolt and Zwift.

“We want to thank all of those European founders who chose to partner with us over the past ten years,” Fergal Mullen, co-founder and Partner at Highland Europe, said in the announcement. “It is their ambition, talent and drive that inspires us as we build category-defining businesses together.”

While today’s market conditions “are not easy,” he continued, “but our founder-led companies continue to scale impressively and efficiently, with several world-leaders in the mix. We’re pleased that our investors share our conviction and thank them for their continued trust.”

In light of what has been a difficult six months for global fundraising defined by a marked slowdown in VC activity in the second half of 2022, the closure of such a large fund is no small feat.

Following a record-breaking 2021, venture capitalists have been less eager to part with their cash in recent months.

Venture capital dollars have continued to flow into Europe, however, especially to investment hubs like the U.K.’s remarkably resilient FinTech ecosystem, but the overall picture has been one of lower valuations and a decline in dealmaking.

With previous funds, Highland Europe has proven its ability to close deals across the continent and the firm already holds investments in companies from numerous European countries, not just a handful of VC hotspots.

With its new fund, the firm is well-capitalized to support its existing portfolio of businesses as they continue to scale, as well as to invest in new opportunities that may arise.

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